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HomeMy WebLinkAbout15 - Police Chief Employment AgreementCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 15 May 24, 2005 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Homer L. Bludau, City Manager 949 - 644 -3000, hbludau @city.newport- beach.ca.us SUBJECT: Employment Agreement for Police Chief Bob McDonell ISSUE: Does the City Council want to approve the proposed employment agreement for Police Chief Bob McDonell? RECOMMENDATION: Review and approve the proposed employment agreement, by which Chief McDonell would continue to serve as the Newport Beach Police Chief after his official retirement. DISCUSSION: After serving almost 12 years as the Newport Beach Police Chief, and for over 36'/2 years in the law enforcement profession (19 of them as a Chief of Police), Bob McDonell has decided that due to retirement program restrictions, it is in his best interests to officially retire as of July 1, 2005. Based upon my desire to retain Chief McDonell, I am proposing a contractual agreement, which Chief McDonell finds acceptable for him to continue in his current role as Police Chief after retirement. City Council Policy F -20 reads, "When not more than 5 years has passed since a person who is a former City employee has left service with the City, all professional services contracts with former city employees or temporary employment contracts with retiring or former city employees shall require approval of the City Council...." There is no doubt in my mind that retaining the services of Bob McDonell is in the best interests of the Police Department, the City organization, the City Council and the community. The following reasons are prominent in proposing this contractual agreement: 1. The Police Department has undergone a large number of retirements over the past two years, including among the top -level ranks of the Department, with more senior level retirements anticipated by the end of 2005. Employment Agreement for Police Chief Bob McDonell May 24, 2005 Page 2 2. These retirements are being filled by a new "generation" of highly capable, yet much less experienced, police management and supervisory professionals, who will need to grow individually and together as a management team. 3. One of Chief McDonell's great strengths is in the selection and promotion of Department personnel, in combination with his skills at holding people accountable for their responsibilities. 4. Chief McDonell's experience with the Department and the community will be critical in the near future for maintaining the highly professional and ethical work culture that currently exits at the Police Department. 5. The retirement/rehire for Police Chiefs is not a new concept. It is allowed by the PERS retirement system, and has been utilized throughout the State and within Orange County. 6. There is no doubt in my mind that Chief McDonell would be afforded numerous other job opportunities in either the public or private sector upon retirement, some of which may be more financially lucrative to him and his family. 7. Chief McDonell has the energy, leadership qualities and commitment to continue to serve Newport Beach in the capacity of Police Chief under this proposed agreement. Key Contract Provisions: The proposed agreement would in many respects treat Chief McDonell as if he were still a City employee. However, in doing so, the City will realize a savings of $26,000 annually in retirement and medical benefit costs associated with the Police Chief's position. Under the terms of the agreement, the Chief would continue to work for and report to the City Manager. The term of the agreement is from July 1, 2005 and would run until June 30, 2007, but could be extended if mutually agreed to and changes in the law would permit it. Chief McDonell would continue to work at his current pay rate and would be provided pay increases equal to those provided for members of the Police Management Association. In the course of his duties, he would continue to be provided a take -home City vehicle. The City would contribute an amount equal to two- thirds of his current retirement cost to a non -PERS retirement plan, thus saving the City more than $22,500 in retirement expenditures. In order for Chief McDonell to work under terms outlined past July 1, 2006, the City Council, by resolution, would need to take public action to request a waiver from PERS limitations on hours worked per calendar year, which is allowed under existing Government Code law. He may terminate this agreement upon a 45 day written notice to the City Manager. He may be terminated with a 30 -day notice from the City Manager. Employment Agreement for Police Chief Bob McDonell May 24, 2005 Page 3 CONCLUSION: The current PERS system is not something of the City's creation. About 90% of California cities belong to the system. However, there are times when the system's regulations "force" an employee into a retirement decision based on when retirement benefits can be maximized. This is the case with Chief McDonell. I believe it is best for the community to recommend this agreement for Council's consideration. Chief McDonell still has a great deal to offer his Department and the community, as well as the Orange County Criminal Justice System as a whole, based upon his leadership of the County -wide Integrated Law & Justice Project. Before long, the Chief will become "fully" retired, and when that time comes, and I believe the approval of this agreement will better prepare the Department for that loss and assist the new Chief who will follow him. Funding Availability: Included in the Department Budget Submitted by: Homer L. Bludau, City Manager Attachments: Employment Agreement EMPLOYMENT AGREEMENT The City of Newport Beach ( "City') and Robert J. McDonell ( "McDonell ") agree as follows: McDonell intends to retire under the Public Employees Retirement System (PERS), effective June 30, 2005. City desires assurances of the continued services of McDonell as a Chief of Police, having served at that rank for over 19 years (approximately 12 of them in Newport Beach), in order to retain his experience, knowledge, leadership, and abilities. His continued service as Chief is essential while the Department undergoes a significant turnover in the management of that organization as a result of planned retirements and promotions. 2. McDonell desires to continue in the employment of City to the extent permitted under PERS regulations to assist in the transition of the Organization in lieu of seeking other employment. McDonell intends to make application for retirement upon the execution of this AGREEMENT, consistent with the specified terms. THEREFORE, in consideration of the above recitals and of mutual promises and conditions in this AGREEMENT, it is agreed as follows: SECTION 1. Employment as Police Chief City shall continue to employ McDonell as Police Chief of the City of Newport Beach to perform the functions and duties of that position as specified in the Municipal Code of the City of Newport Beach and other relevant State Codes. McDonell shall also perform other duties assigned by the City Manager, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cities generally and are performed by other management employees of other municipalities and are not inconsistent with his responsibilities and obligations as a Peace Officer. SECTION 2. Term of Agreement A. Subject to earlier termination as provided for in this AGREEMENT, McDonell shall be employed for a term beginning July 1, 2005 and ending on June 30, 2006. The term of this agreement will be automatically extended one additional year through June 30 2007, provided City obtains the required PERS approvals as outlined in Government Code Section 21221(h), or other legislative action occurs to allow the extension of this agreement beyond the allowable 960 hours of permissible compensated work by a PERS Retiree in each calendar year. Otherwise, without such approval or other relief, the term of this agreement would expire on June 30, 2006. B. City agrees in good faith to pursue the required approval from PERS when appropriate in order to carry out the terms of this AGREEMENT. C. During the term of this agreement, McDonell shall devote such time, interest and effort to the performance of this AGREEMENT as may be reasonably necessary in the performance of his duties as Police Chief. SECTION 3. Duties and Authority During the term of this agreement and any mutually agreed upon extensions, City shall employ McDonell as Chief of Police, and McDonell shall be vested with the full power and authority to manage and conduct all the business of the Police Department as is provided for by the City of Newport Beach Municipal Code and the laws of the State of California. SECTION 4. Compensation A. On the effective date of this agreement, City shall continue to pay McDonell at his then current rate of base pay and other salary related compensation, paid at the same time and in (26) equal installments consistent with other Police Management personnel, subject to any limitations contained in PERS regulations. The rate of McDonell's base pay and other salary related compensation shall be adjusted whenever the compensation of other Police Management personnel is adjusted, and in such a manner as to keep the compaction /separation of those rates at the now current rate between Sergeant and Lieutenant and Lieutenant and Captain. This AGREEMENT shall be deemed amended whenever the City Council adopts a resolution changing the rate of pay or manner in which such compensation and /or benefits are paid to other Police Management personnel. B. City shall have the right to deduct or withhold from McDonell's base compensation and any and all sums required for Federal income and Medicare related taxes and all State or local taxes now applicable or that may become applicable in the future. City may also continue to deduct or withhold from McDonell's compensation any and all sums McDonell is obligated to pay because of participation in plans or programs described in Section 6 of this Agreement. Section 5 Termination of Employment/Severance Pay A. McDonell may terminate this Agreement by giving the City at least forty -five (45) days prior written notice of termination. B. City may terminate McDonell, without cause, upon notice by the City Manager. McDonell shall be furnished with written notice stating the City Manager's intention to terminate this AGREEMENT. McDonell would be entitled to a "name clearing" hearing with the City Manager in the event he is terminated for cause. C. McDonell shall receive severance pay equal to one month of his total compensation as of the date of termination, unless he is terminated because of criminal conduct, malfeasance in office or a gross abuse of discretion. Section 6 Employee Benefits A. McDonell shall accumulate Paid and Administrative leave at his then current rate at the time of the execution of this AGREEMENT and shall be paid for any unused leave accrued at the termination of this agreement. B. McDonell shall be eligible to receive the same health benefits currently afforded. City shall contribute the differential in what is allowed as part of the Retiree Medical Benefit at the time this AGREEMENT is executed, and the then current allocation for other Police Management personnel. 2 C. McDonell shall be entitled to participate in plans and programs available to other Police Management personnel, such as short term and long -term disability plans, life insurance plans, Public Agency Retirement System (PARS) plans, and deferred compensation plans. D. City agrees to continue to pay the annual premium for McDonell to the California Peace Officers Association (CPOA) Legal Defense fund for independent legal representation on matters affecting the course and scope of his employment. E. The provisions of the then current Personnel Rules, Regulations and Policies as well as those provisions of the City Charter and Municipal Code that relate to the terms and conditions of employment shall, except to the extent inconsistent with the terms of this AGREEMENT, apply to McDonell as they are applied to other management employees provided, however, McDonell shall not be entitled to any compensation or compensatory time off for overtime. F. McDonell shall continue to be provided with an automobile that may be used for City business as well as for personal use within al 00 mile radius of the City; however, McDonell shall purchase gasoline for the automobile when used for reasons other than City business in the event such use falls outside of the one hundred mile radius of the City. McDonell shall report all such personal use to the City Manager when the latter occurs. G. McDonell shall be provided with the required complete Police uniforms and related equipment consistent with his responsibilities. H. City will no longer contribute the Employer and Employee contribution to the PERS Retirement System on behalf of McDonell; however, City will contribute the maximum allowable annual contribution to the PARS program on McDonell's behalf during the term of this agreement. (At the current rate charged by the State for McDonell's PERS contribution, such an amount represents an approximate net savings of $22,254 to the City by substituting PARS for the PERS benefit cost.) McDonell shall be eligible for Workers Compensation coverage in the event of a duty related accident or injury for which coverage is allowed under State and Federal law. SECTION 7. Business Expenses City shall reimburse McDonell for all reasonable business expenses actually incurred by McDonell in the performance of services pursuant to this agreement. SECTION 8. Meetings and Conferences During the term of this AGREEMENT, McDonell shall, at City expense, be entitled to continue to attend a reasonable number of local, State and National meetings and conferences as funded in the Police Department Budget and which are relevant to his performance of service pursuant to this agreement. SECTION 9. Indemnification by City City shall, to the maximum extent permitted by law, indemnify and hold McDonell harmless for any acts or decisions made by him in the course and scope of employment. To the same extent, City will pay and advance all expenses, including reasonable attorney's fees and costs of court approved settlements, actually and necessarily incurred by City in connection with the defense of any action, suit or proceeding and in connection with any appeal, which has been brought against McDonell by reason of his performance of services as an officer or agent of the City. SECTION 10. General Provisions A. McDonell shall serve at the pleasure of the City Manager and may be terminated "at will' in accordance with Section 5 of this AGREEMENT. B. Any notice required by this AGREEMENT shall be in writing and deemed given when personally delivered (to the City Manger in the case of the City), or deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested, and properly addressed. C. This AGREEMENT represents the entire understanding of the parties and any modification is effective only if it is in writing and signed by the party to be charged. SECTION 11. Severability It is understood and agreed that if any part, term, or provision of this AGREEMENT is held by the courts to be illegal or in conflict with the laws of the State of California, the validity of the remaining portions of the AGREEMENT shall not be affected and the rights and obligations of the parties shall be construed and enforced as if the AGREEMENT did not contain the particular part, term, or provisions. Dated: CITY OF NEWPORT BEACH A Municipal Corporation Dated: By: Homer Bludau, City Manager Robert J. McDonell, Police Chief ATTEST: APPROVED AS TO FORM: Lavonne Harkless, City Clerk 0 Robin Clauson, City Attorney